Synopsys, one of the leading suppliers of electronic design automation (EDA) software tools used to design chips, is being probed for allegedly supplying their products to blacklisted Chinese companies.
Investigators from the U.S. Department of Commerce are looking into allegations that Synopsys has provided EDA tools to Huawei's HiSilicon unit to make chips at Semiconductor Manufacturing International Corp., according to a Bloomberg report that cites two people with knowledge of the matter. The software products were reportedly supplied via 'affiliates in China' though it is unclear which tools or IP were provided to Huawei's HiSilicon and SMIC as well as when.
Because the U.S. government considers Huawei and its HiSilicon chip development arm a threat to the national security, it is prohibited to supply any semiconductor technology developed in the USA to Huawei and its subsidiaries without a special license from the U.S. Department of Commerce (which reviews such license applications with a presumption of denial), which is why even Taiwan Semiconductor Manufacturing Co. cannot make chips for Huawei.
U.S. restrictions on SMIC are less severe. Specifically, the DOC wants producers of equipment and other technologies needed to make semiconductors using 10nm nodes or finer to apply for an export license, which will be subject to a presumption of denial. Formally, Synopsys does not need a license to supply EDA software tools to SMIC for its 14nm or N+1 nodes. However, if those programs are used by HiSilicon or for HiSilicon, it needs a license from U.S. authorities.
Synopsys denies any wrongdoings, but admitted that DOC's Bureau if Industry and Security began to look into its transactions last December.
"Due to the nature of our business and technology, governmental authorities may inquire into transactions between us and certain foreign entities," the company wrote in a filing with the Security and Exchange Commission. "For example, we recently received an administrative subpoena from BIS requesting production of information relating to transactions with certain Chinese entities. We believe we are in full compliance with all applicable regulations and are currently working with BIS to respond to its subpoena."
U.S.-based Synopsys and Cadence are the leading developers of EDA software. In most cases, it is virtually impossible to design or produce a complex chip without using software from these two companies.
It is noteworthy that late last year a report emerged that Huawei and SMIC were looking forward building a fab together to make chips exclusively for the former.